When I first wrote about the then little known InterOil (IOC) in 2004 at Business Week where I had written the Inside Wall Street column for 28 years (until Dec. 30, 2010), the reaction from the print media, cable-TV, and the shorts, of course, was harsh and unusually loud.

Part of the reason: Although based in Texas, InterOil’s major oil-and-gas drilling operations are in Papua, New Guinea -- yes, Papua New Guinea.

The company has been building in that far-flung tiny nation a fully integrated energy business involving upstream or exploration, liquefied natural gas (LNG), refining and downstream operations. InterOil operates Papua’s sole refinery and also owns a network of retail and wholesale distribution outlets as it explores for oil and gas, and building an LNG plant.

Critics who were no doubt inspired by those short the stock ridiculed the column and bellowed that the idea of investing in an obscure company operating in Papua was absurd and laden with risks. When I wrote the column, InterOil’s stock was trading in the $30s. How much is it now?

InterOil hit a new record high of $91 a share on Aug. 9, 2012. So who’s laughing now? Not the shorts, I presume. But the stock is likely to push even much higher partly because of a possibility that Royal Dutch Shell (RDS) will do a partnership deal with InterOil on its LNG terminal and assets in Papua.

Reuters, Dow Jones newswires as well as Fox Business have widely reported that Shell has been in talks with InterOil that could result in Shell buying into InterOil’s Papua, New Guinea, operations, including its LNG terminal. Reuters quoted Shell CFO Simon Henry as acknowledging that Shell had been “speaking with InterOil over quite some period of time,” about its business in Papua where it has petroleum licenses covering 3.9 million acres.

And Dow Jones newswire has quoted Shell’s CEO Peter Voser as saying that “it’s an interesting play there (New Guinea), and “we have talked to the government, and we are looking at it,” but skirted the question of whether Shell was preparing takeover bid for InterOil.

My Inside Wall Street column on Dec. 26, 2004 had noted that InterOil was exploring for oil in over 8.8 million acres, and that the company’s distribution and refining businesses alone were worth the price of the stock.

I quoted the oil-and-gas industry analyst at investment firm Raymond James at the time, Wayne Andrews, who had said that InterOil identified 10 sites in Papua that showed unproved resources with a potential of 4.5 billion barrels. I also cited Joe Hill of Imperium Capital Management, which at the time owned a 2% stake in InterOil, who said the company’s initial drilling in 2003 showed “encouraging results.” He boldly predicted that the stock would leap to $70 a share in 12 months.

Several investors who know InterOil quite well and are familiar with the oil-and-gas business and conditions in Papua remain optimistic about InterOil’s prospects. They see the stock hitting at least $100 a share even as it has just rocketed to an all-time high.